From: Katharine_Hanley@magic-sw.com
To: Katharine_Hanley@magic-sw.com
Date: Mon, 4 Oct 1999 05:51:51 -0700
Subject: Magic Software Signs Developer Partnership Agreement with Red Hat


MAGIC SOFTWARE SIGNS DEVELOPER
PARTNERSHIP AGREEMENT WITH RED HAT

Magic Enterprise Server v.8.3 To Be Included
On Red Hat Linux 6.1


IRVINE, CA (October 4, 1999) - Magic Software Enterprises (NASDAQ: MGIC)
announced today that it has signed a developer partnership agreement with
Red Hat, Inc. (NASDAQ: RHAT) that includes release of Magic Enterprise
Server v.8.3 on Red Hat Linux 6.1, Red Hat's new product distribution. This
development is consistent with Magic's strategy of bringing e-commerce and
other business solutions to the Linux platform.

Magic will benefit from being able to leverage access to the rapidly
expanding Red Hat Linux installed base, who need technology that can help
them quickly develop business solutions for the platform.  The Linux
community will benefit because they will have more immediate access to the
solutions developed by Magic's Solutions Partners, many of whom already
have expressed strong interest in porting their existing e-commerce and
other business solutions to the Red Hat Linux platform.

"I am particularly excited about this new development because it will help
to actively increase the number of enterprise-level e-commerce and other
business solutions.  This is necessary to propel Linux's penetration of the
commercial workplace and ensure its long-term success," said Jon "mad dog"
Hall, Executive Director of Linux International.

The availability of Magic Enterprise Server v.8.3 brings e-commerce and
other business solutions to the Red Hat Linux platform.  It enables
developers working on other platforms to quickly and seamlessly port
existing business solutions to Red Hat Linux 6.0 and 6.1.  In addition,
developers can take advantage of Magic's strengths as the most productive
application development technology on the market to build e-commerce
solutions and fully realize Linux's potential as one of the most reliable
Internet operating systems available.

 "Magic is a firm believer in the viability of the Linux operating system,"
said David Leichner, vice president of worldwide marketing for Magic.
"Just prior to this partnership with Red Hat, we ported our award-winning
business-to-business e-commerce solution, Magic eMerchant(, to the Linux
platform.  Now, we are exploring with Red Hat how we might extend this
joint development and marketing arrangement to other markets around the
world where Magic has a strong existing installed base."

About Magic Software
Magic Software offers the most productive, state-of-the-art development
technology, customizable applications, and services for cost-effectively
solving business problems.  Using Magic, companies can efficiently leverage
their existing resources and take advantage of emerging technologies, such
as Linux and e-commerce.

Magic technology, applications and services are available through a global
network of subsidiaries, distributors and solutions partners in more than
50 countries.  The Company is located at 1642 Kaiser Avenue, Irvine,
Calif., 92614, telephone (949) 250-1718, fax (949) 250-7404,
http://www.magic-sw.com.

About Red Hat
Founded in 1994, Red Hat is a leader in the development of Linux-based
operating system software and services.  Based in Durham, NC, red Hat
builds the most accessible and advanced server operating system available
anywhere with technical innovations, such as RPM and the disk druid
installation tool.  Red Hat Linux, which is available for Intel, Compaq
Alpha and Sun SPARC platforms, is distributed directly from the Company and
through Red Hat's partner distributor and reseller programs, which include
top PC and server manufacturers, such as Dell, IBM and Hewlett-Packard.

Except for the historical information contained herein, the matters
discussed in this news release include forward-looking statements that may
involve a number of risks and uncertainties.  Actual results may vary
significantly based upon a number of factors including, but not limited to,
risks in product and technology development, market acceptance of new
products and continuing product demand, the impact of competitive products
and pricing, changing economic conditions, both here and abroad, release
and sales of new products by strategic resellers and customers, and other
risk factors detailed in the Company's most recent annual report and other
filings with the Securities and Exchange Commission.